Green Cross International

Contested Waters: The Privatization of Urban Water Services and Conflict Prevention

“One in five persons worldwide lacks access to safe drinking water. Half the world lacks sanitation; millions die from waterborne diseases.

In a few decades, as we seek a fifth more water for 3 billion new people, one in three of us may struggle to drink or bathe.

Some see in our scarcity a harbinger of troubled waters to come… We see water as an instrument, a catalyst for peace”

- Kader Asmal, Chair, World Commission on Dams

The International Institute for Sustainable Development (IISD) is an independent, not-for-profit corporation headquartered in Winnipeg, Canada. Its mission is to champion innovation, enabling societies to live sustainably. This document is printed on recycled paper.

Jason Switzer, Project Officer Environment and Security Initiative IISD European Office International Environment House C-404 13, Chemin des Anemones Chatelaine, Geneva Ch-1219 Switzerland

Tel: (41) 22 979-9630 Fax: (41) 22 979-9093 E-mail: jswitzer@iisd.ca Internet: http://www.iisd.org Fiona Curtin, Water Program Manager Green Cross International 160a rte de Florissant Conches, Geneva Ch-1231 Switzerland Tel: +41 22 789 1662 Fax: +41 22 789 1695 E-mail: fiona.curtin@gci.ch Internet: http://www.gci.ch

This project proposal was developed with the support and collaboration of the IUCN Commission on Environmental, Economic and Social Policy (CEESP).

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“Preliminary research indicates that scarcities of critical environmental resources –especially cropland, freshwater and forests –contribute to violence in many parts of the world…[I]n coming decades the incidence of such violence will probably increase.” - Thomas Homer-Dixon, 1999

Green Cross International

Contested Waters: The Privatization of Urban Water Services and Conflict Prevention

Project Proposal In Brief… The state of water services provision in much of the developing world is deplorable from every viewpoint, whether social, environmental or economic. Water is essential to the lives and livelihoods of all humanity. And its quality and supply is vital to the sustenance of natural systems. Yet over 1 in 5 people alive today lack daily access to clean water, resulting in an estimated 3.4 million deaths each year from waterborne illnesses. Even those city dwellers who have access to water through informal vendors often pay 10 to 20 times the amount charged by the utility company. More than 90% of the wastewater in the developing world and one-third in developed countries is not treated, leading to dire consequences for downstream communities’ water supplies, for agriculture and for fisheries. With population growth, unregulated expansion of cities and the retreat of the public sector from the financing of public infrastructure and services, urban water systems are literally bursting under the strain. Ensuring urban access to water services is therefore a fundamental prerequisite for poverty alleviation, and one of the key challenges to achieving Sustainable Development. In order to meet the estimated US$11-14 Billion of new investment needed each year for the next three decades to address this crisis, the international community is promoting the privatization of water supply and sanitation, often to the exclusion of alternative institutional arrangements. Certainly, the private sector is the greatest engine of funds, innovation and know-how available for addressing this urgent problem. Yet privatization attempts have in the past been laden with controversy, burdened by public protest and legal challenge. In some cases, even where they have succeeded in achieving substantial environmental, social and economic performance improvements, privatized systems have collapsed under the weight of public opposition and even violent conflict. An emerging body of research is teasing out the links between natural resource access and conflict. In the

area of urban water access, it has focused on the potential for conflicts to emerge from river hydromodifications (e.g. dams), from interbasin water transfer schemes, and from tensions between urban needs and those of irrigated agricultural areas. Comparatively little attention has been focused on the impact of alternative institutional arrangements on resource access and social tension. Conflict is, however, a common thread in many privatization attempts.

A safe and equitably-accessible water supply with minimal environmental impacts is at the heart of urban environmental security - the natural resource basis for social and economic stability and development. Yet too many urban inhabitants lack access, and too many pay the price for the environmental impacts of urban water services. It is clear that new investment and innovation must be forthcoming to address this crisis, and that the leading source for both is likely to be the private sector.

INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT

INSTITUT INTERNATIONAL DU DÉ V ELO P PEM E NT DUR A BL E II

SD

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“In Vietnam, children define people in poverty as those without drinking water” - Voices of the Poor, World Bank 2000

This project seeks to assist in the identification of the most effective and appropriate means for improving urban water access and reducing its environmental impact by addressing a central policy question: In what circumstances should the private sector play a role in urban water services provision, and how can it do so in ways that do not generate social tension ? This project seeks to draw, from a series of representative case studies of privatization in varied social, economic and geographic settings, the elements of an effective decision-making process for private urban water service provision. It will map out the range of institutional alternatives, clarify the environmental, social and economic trade-offs between them, and identify the underlying roots of potential conflict and tools for conflict resolution over urban water services. An expert task force will be assembled to assess the lessons emerging from the experiences, both positive and negative, of alternative strategies for urban water services provision involving the private sector. These lessons will be

directed primarily to public decision makers, to donors and water company managers. A handbook, based on the case studies, feedback from policy-makers, private companies and citizens, and the experts' analysis,

will be produced and disseminated to decision-makers in public and private sectors, and among civil society, in communities considering or in the process of undertaking a water service privatisation. The task force will present its knowledge base to decision-makers and the public through the Rio+10 process (2002) or World Water Forum (2003), through training programmes for public and private officials, and through the World Wide Web.

The unique contribution of IISD, IUCN and GCI will be: - to build a knowledge base of cases illustrating the factors that can lead to or prevent

conflict over private sector involvement in water services provision and consequences, building on our past work on environmental security

- to build this knowledge through a multi-stakeholder expert process, and - to make this knowledge available to government, civil society and private sector decision-

makers through educational partnerships and through our award-winning internet presence.

This proposal invites your financial or personnel support for this 18-month project:

• In the first phase, a task force will be convened, composed of experts from the private and public sectors, civil society and academia, to examine the relevant issues and design a research strategy. Budget: US$ 45,494

• In the second phase, the research will be completed. The task force will be reconvened to identify

conclusions. The results will be published as a book, and on the website. Presentations will also be made to the Rio+10 (2002) or World Water Forum process (2003). Budget: US$ 213,205

• With the task force recommendations as its blueprint, in the third phase, IISD and Green Cross will work with partners in the public and private sectors to implement and assess pilot projects, and to disseminate educational materials directly to public sector decision makers, corporate managers, sectoral associations, and civil society actors, in communities considering or undertaking a water service privatization. Proposal to be developed in consultation with project partners and participants

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Table of Contents In Brief… ......................................................................................................................................................... 3 Table of Contents ............................................................................................................................................ 5 Background ..................................................................................................................................................... 6 Project Goal..................................................................................................................................................... 9 Why Green Cross, IISD and IUCN ? ............................................................................................................. 10 Potential Partners.......................................................................................................................................... 12 Activities and Timeline................................................................................................................................... 13 Summary of Deliverables .............................................................................................................................. 16 Monitoring and Evaluation............................................................................................................................. 16 Budget for Phase I......................................................................................................................................... 17 Budget for Phase II........................................................................................................................................ 18 Annex I – Members of Previous IUCN Task Force on Environment and Security......................................... 20 Annex II –Project Team................................................................................................................................. 21

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“In this new century, water, its sanitation, and its equitable distribution pose great social challenges for our world” - Kofi Annan, UN Secretary General

Background The state of water services provision in much of the world is deplorable from every viewpoint, whether social, environmental or economic. Over 1 in 5 people alive today lack daily access to clean water, resulting in 3.4 million deaths each year1. Of those with access through informal water vendors, many spend 10 to 20 times the cost of connection to the municipal water system for their daily needs2. Ninety percent of cities in the developing world, and one-third of those in the developed world, discharge their municipal sewage – untreated – into surface waters3. Untreated sewage is a major cause of collapsing fisheries, diminished water supply quality, and disease. In India, only 217 of 3,119 towns surveyed treat their sewage at all4. Even in Canada, which leads the world in Human Development5, almost a quarter of its municipal sewage is given only primary treatment before release into waterways6. Of the 542 European cities with more than 150,000

inhabitants, 20% discharge their sewage into waterways with little or no treatment7. With population growth, unregulated urban expansion8 and the retreat of the public sector from the financing of infrastructure9, our cities’ water systems are quite literally bursting under the strain.

The investments required to provide efficient and reliable domestic water and wastewater services to all members of the community are in many cases beyond the capacity of governments, which may already be dedicating up to 15% of total public spending on water-related infrastructure10. Where is the estimated US$ 11-14 Billion each year in new investment capital needed in the next three decades to meet these concerns to come from11 ? In line with the prevailing trend in electricity generation and public transit, the answer being proposed by international financial institutions, by donors, and by governments themselves is a shift towards privatization of water supply and sanitation, in particular for large urban communities. In fact, there is evidence that privatization is being promoted by international donors to the exclusion of other potential institutional arrangements12. 1 WBCSD & UNEP. Industry, Fresh Water and Sustainable Development. World Business Council for Sustainable Development, 1998. . 2 UNDP. Human Development Report, 1998:52. 3 UNDP. Human Development Report, 1998:68. 4 Rosegrant, M. Water Resources in the 21st Century: Challenges and Implications for Action. International Food Policy Research Institute, 1997. http://www.ifpri.cgiar.org . 5 UNDP. Human Development Report, 2000. 6 National Round Table on Environment and Economy (NRTEE). State of the Debate on the Environment and the Economy: Water & Wastewater Services in Canada, 1996:8. 7 ENS. “European Cities’ Sewage Standards Stink, Says EU”. March 20, 2001. http://ens.lycos.com/ens/mar2001/2001L-03-20-11.html . 8 "The current urban population of 2.8 billion will increase to 3.8 billion in 2015 and to 4.5 billion in 2025. Megacities create tremendous demands for water and act as dense sources of pollution. This challenges the ability of those in charge of water management to provide for the needs of all inhabitants." Water for Health: Taking Charge, World Health Organization, 2001, page 12. 9 Rosegrant, 1997:6. 10 Briscoe, John, The Financing of Hydropower, Irrigation and Water Supply Infrastructure in Developing Countries. Water Resources Development, Vol. 15, No. 4, 1999. 11 Rosegrant, 1997:10. 12 See for example Grusky, S. IMF forces African countries to privatise water. Globalization Challenge Initiative, Feb 8, 2001. http://www.afrol.com/News2001/afr003_water_private.htm .

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“Water is an emotive issue that carries social, political and economic significance. We recognise that the decision to seek private sector help is not always an easy one” - International Waters, 2001

Water service privatization is a highly emotional issue, and as a result, it is often controversial. Proponents argue that when done right, privatization will enhance service, encourage conservation, and free public resources towards meeting the needs of the poor and the unserved13. Critics argue that ‘for-profit’ water encourages graft and corruption, reduces service quality, raises prices, and cuts off customers who cannot afford to pay. As one critic alleges, “when privatization hits the Third World, those who can’t pay will die”14. It is unquestionable that a policy or management change which improves peoples' access to clean drinking water and sanitation will be responsible for saving and transforming lives. Changes made without consideration for local concerns, social outcomes, or environmental consequences for the whole catchment area, may lead to conflict and the failure of the best-intentioned efforts. Such conflicts can be waged in the courts, in the media or on the streets. They can pit the public against the private company concerned, or be fought between those users in the catchment who benefit from the privatization scheme and those who are overlooked or even suffer as a result. They can even result from a change in government and therefore of ideology regarding ‘public services’. In some cities, privatization has delivered on its promise of better service for more people with less environmental impact: - In Abidjan, Cote d’Ivoire, privatization of urban water services has resulted in increased investment in infrastructure and enhanced service. Potable water service has been extended to 72 % of the urban population by 1989, from 30 % in 197415. - In England and Wales, a sweeping campaign of water service privatizations in the early 1990’s has increased from 87% in 1989 to 96 % in 1996 the number of municipal sewage plants complying with outflow discharge permits, and by nearly 20% the number of beaches whose waters are now clean enough for swimming16. An emerging body of research is teasing out the links between natural resource access and conflict17. In the area of urban water access, it has focused on the potential for conflicts to emerge from river hydromodifications (e.g. dams), from interbasin water transfer schemes, and from tensions between urban

needs and those of irrigated agricultural areas. Comparatively little attention has been focused on the impact of alternative institutional arrangements on resource access and social tension. Conflict is, however, a common thread in many privatization attempts.

13 See for example Public-Private Infrastructure Advisory Facility, World Bank: . 14 Barlow, M. “Desperate Bolivians Fought Street Battles to Halt a Water-For-Profit Scheme”, Globe & Mail, May 9,2000. http://www.globalpolicy.org/socecon/bwi-wto/wbank/water.htm 15 Rosegrant, p. 19. 16 BBC. “Water Week – exploring the issues”, http://news.bbc.co.uk/hi/english/static/waterweek/issues.html 17 See for example, Homer-Dixon, T. Environment, Scarcity and Violence, 1999; Or Dalbelko, G., Lonergan, S. and Matthew, R. State of the Art Review on Environment, Security and development Cooperation. IUCN/OECD DAC, 2000. May be downloaded from www.oecd.org .

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Urban water-related conflict can emerge from several pathways. Direct Source of Conflict

1. Resource scarcity: The urban-rural conflict over irrigation vs. urban water supply is an example of direct competition over access to water as a scarce resource.

2. Inequitable access: Even where supplies are adequate, the underserved may be unable to afford

to pay for water use. Indirect Source of Conflict

3. Consequences of Interventions to Increase Supply: major hydromodifications, protection of upstream watersheds and control of river use can deny access to, degrade or destroy other resources as a byproduct.

4. Unsustainable water use practices: such as untreated urban sewage - can degrade or destroy

resources needed by downstream communities (e.g. fisheries).

5. Worldview: Last, conflict can emerge over different worldviews regarding water access and use, as is the case among those who see water as a purely public good and object to privatisation of public utilities on ethical grounds. Or, those whose religious practices require certain forms of river use - such as funeral rafts - that degrade water quality.

Conflict can emerge where companies fail to recognize the link between resource access and social tension: - In Cochabamba, Bolivia, more than 40% of the region's citizens have no direct access to water resources. In 1999, following World Bank advice, Bolivia granted a 40 year privatization lease to a British subsidiary of the Bechtel Corporation, giving it control over the water utility for the town. The company raised water rates as a prelude to infrastructure investment. In mid-January 2000, residents called a general strike in protest against higher water prices and lack of measurable access and service improvements. Cochabamba was placed under martial law, and police were called in. More than 175 protesters were injured and several more killed in street battles over four days. In concession to the public uprisings, the Bolivian government broke the contract that had privatized the region's water system. Becthel's subsidiary in Bolivia withdrew, claiming some US$40 M in damages.18 The resolution of the urban water crisis in Cochabamba will require therefore not only compensation for the failed privatization, but new investment sources, which may be even harder to attract in the wake of the past civil violence. A safe and equitably-accessible water supply with minimal environmental impacts is at the heart of urban environmental security - the natural resource basis for social and economic stability and development. Yet too many urban inhabitants lack access, and too many pay the price for the environmental impacts of urban water services. It is clear that new investment and innovation must be forthcoming to address this crisis, and that the leading source is likely to be the private sector. 18 See for example Palast, G. “New British empire of the dammed: Bolivia’s water supply is the latest acquisition…” in The Observer, Sunday April 23, 2000. http://www.guardianunlimited.co.uk/archive/article/0,4273,4010929,00.html .

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Project Goal This project will assist in the identification of the most effective and appropriate means for improving urban water access and reducing its environmental impact by addressing a central policy question: In what circumstances should the private sector play a role in urban water services provision, and how can it do so in ways that do not generate social tension ? This project seeks to draw, from a series of representative case studies, the elements of an effective decision-making process for public-private partnerships for urban water service provision and the enhancement of environmental security. It will map out the range of institutional alternatives, clarify the environmental, social and economic trade-offs between them, and identify the underlying roots of potential conflict and tools for conflict resolution over urban water services. An expert task force will be assembled to assess the lessons emerging from the experiences, both positive and negative, of alternative strategies for urban water services provision. These lessons will be directed primarily to public decision makers, to donors and water company managers. Hypotheses

• Urban water service provision is a serious impediment to sustainable development. • The private sector has a substantial role to play in the resolution of this crisis. • The set of institutional options and partnerships under consideration by public decision makers has

been artificially constrained due to donor pressures, ideologies and special interests. • Environmental conflict can emerge from scarcity or inequitable access, as a consequence of

interventions to increase supply, as a result of unsustainable water use and from conflicting worldviews. Conflict can be played out through violence, protest, legal challenge, and international pressure.

• Conflict is contrary to the resolution of the water crisis. • Alternative decision processes and institutional arrangements are available and appropriate for

different contextual conditions. These can resolve many of the sources of conflict. Potential Case Studies Water & Conflict

• Bolivia - La Paz and Cochabama: A contrasting Tale of Two Cities. • Cote D'Ivoire - Abidjan, an African model: Private Monopoly, Government Subsidies. • Johannesburg - the role of the unions (conflict in June 2000), and the catchment approach. • Manila - People-prompted privatisation. • Trinidad - lack of dialogue; loss of investment.

Models of Cooperation: • Water in African Cities UNEP/Habitat initiative; • Business Partnership for Development - Water and Sanitation Cluster initiative

Research Questions

1. Economics. What is the economic size of the potential market for urban water services ? What are the different pricing and financing options, and how do these relate to levels of service, access for the poor, and protection of the environment ? Are there conflicts of interest that create tradeoffs between quality of service and economic return ?

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2. Information. Do decision makers, whether local or state government, donor or corporate, have access to and understand the full range of options available to improve their water distribution, including those involving non-private partners ? Does the public likewise have meaningful access to information on the options ?

3. Participation. Are those impacted by a proposed institutional change – including those employed both formally and informally in water service provision – included in the decision-making and design processes ?

4. Sensitivity. How familiar is the prospective private water service provider with the particular cultural, social, environmental and political situation in the region ?

5. Integration. Are social and environmental needs, including downstream and possibly transboundary impacts, integrated into the planning process from the very beginning ? What plans are in place for ensuring access for those without, and for resolving conflicts between economic and social values, as in the case of shut-offs for unpaid water tariffs ?

6. Regulation. Does the public sector have adequate capacity for regulation – monitoring and compliance assurance – in order to ensure service delivery by the private sector ? What mechanisms are in place to prevent corruption and misdirection of funds ? What plans are in place to deal with unstable political environments ? What legal structures govern water service provision?

7. External Influences. What is the role of the international financing community (IMF, World Bank, EU, regional banks and initiatives) in encouraging or discouraging a full assessment of options, transparency and public participation in decision-making ?

8. Contingency. Can privatization work in cases of weak/unstable governance ? What protection does the private provider have in cases of conflict and change of government?

9. Scale. What are the relevant differences in institutional options between megacities and small cities ?

Analysis of the connection between water privatisation and environmental security is in its early stages. The International Institute for Sustainable Development, World Conservation Union and Green Cross International hope that this study will throw light on this issue and inspire further debate and reflection by the concerned partners, policymakers, and other stakeholders. Why Green Cross International, IISD and IUCN? Water conflict prevention is a central goal for Green Cross International. Through mediation and the anticipation and resolution of potential conflict, GCI hopes to promote dialogue and mutual understanding in support of water management. In 1997, GCI published a report on International Freshwater Conflict: Issues and Prevention Strategies and began to compile a database of potential and actual water-related conflicts and propose actions for their prevention and resolution. This work was supported by a series of workshops, roundtables and practical projects in the Middle East, West Africa and Eastern Europe. The impact of this work was such that GCI was selected to lead the Water for Peace component of the World Water Vision for the 21st Century. Under the guidance of a panel of former world leaders and in consultation with many international and regional experts, GCI probed the questions relating to National Sovereignty and International Watercourses, resulting in a 150-page report which was presented at the 2nd World Water Forum in The Hague. GCI also hosted high-level debates on Water for Peace in the Middle East and Southern Africa, with the participation of government representatives from all relevant countries, as well as stakeholders and experts. The Sovereignty Panel and Water for Peace debates pointed to the need to respect not only state sovereignty, but also the sovereignty of individuals and communities over the water sources which must

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sustain them and their future generations. All people have a right to be consulted and empowered in the decision-making process surrounding the management of their water supply, especially minority and marginalised groups. By extension, in cases where authorities have imposed privatization of a community's water supply without prior consultation, or even information, conflict has frequently emerged. Like unilateral action by one state in a shared basin, such decisions can lead to hardship and social tension. Green Cross is in the process of launching integrated projects to encourage cooperation over the management of transboundary water resources in five major international river basins. It proposes to address these problems in a practical manner by appealing to local governments, parliamentarians, river basin authorities, community and user institutions, the private sector and NGOs, and by using our international network of national affiliates in 27 countries to spread and gather information among stakeholders. The International Institute for Sustainable Development (IISD): Balancing environmental, economic and social concerns requires new insights, new kinds of decision processes and new means for collaboration and communication. IISD is committed to promoting and disseminating innovation that supports better living for all – sustainably. The Institute has developed a reputation for practical policy recommendations based on rigorous and collaborative research. It hosts one of the world’s pre-eminent sustainable development knowledge bases, accessible through its award-winning website, one of the first thousand on the internet, with over three million visits each year, and has pioneered several internet-based tools for North-South collaboration. Our project team has extensive experience in corporate environmental issues, natural resource conservation, mediation and conflict resolution. The Institute sees Environmental Security as a thread running through many of the key sustainable development challenges. The European Office of IISD coordinated the IUCN Task Force on Environment & Security (2000) chaired by Ambassador Mohamed Sahnoun, a former Brundtland Commissioner and special envoy of the UN to the Africa Great Lakes region (see Annex I). The task force concluded, among other things, that the links between the private sector and environmental security have largely remained unexplored and are in need of detailed assessment. This task force has produced a book mapping out the links between natural resource conservation and conflict (forthcoming in 2001). Past funders for our work in this field have included the Swiss Agency for Development Cooperation, the UK Foreign and Commonwealth Office, and IUCN’s headquarters and regional offices. IISD intends to play a leading role in translating this emerging field from academic research into practical tools for decision-makers. The World Conservation Union (IUCN) : The world’s pre-eminent union of organizations and specialists dedicated to the conservation of biodiversity, IUCN represents a global membership of 75 governments, 125 government agencies, and over 800 non-governmental conservation organizations, plus six technical and policy-oriented Commissions involving 10,000 experts from over 120 countries. For this reason, IUCN has a unique capacity to bring disparate interests to address common objectives. IUCN was co-convenor with the World Bank of the World Commission on Large Dams, involving a wide range of interests on a controversial topic; the resulting report of the Commission has been widely hailed as an important landmark in improving the relationship between large dams and the environment. Its 1980 publication, the World Conservation Strategy, was prepared in partnership with UNEP and WWF, with collaboration from UNESCO and FAO; it was the first global effort to define sustainable development in terms meaningful to the conservation community. IUCN has had a working group on Environmental Security under its Commission on Environmental Economics and Social Policy (CEESP) and has been addressing sustainable development issues for several decades. IISD has been coordinating the CEESP work on environmental security, linking it to the rest of the Union’s wide-ranging and influential work.

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Together, IISD, IUCN and GCI have the unique capacity and experience to coordinate this practical study of the links between environmental security, conflict and the urgent question of water services financing and operation. Improved urban water service access is crucial to economic growth, public health and stability in all countries, as well as to the maintenance of critical ecosystem functions and food sources. As 40% of the world's population live in international basins, inter-state cooperation is essential. And, as water and the economy are so closely linked, collaboration between the public and private sectors is vital. The need for this project is urgent - many of the developing world's urban communities are today weighing the options for meeting critical water needs. Cooperation, dialogue and participation of all sectors are essential to resolving conflicts of interest and ensuring the best choices for people and for the environment. Potential Partners Several initiatives are currently underway that are looking at water service provision and privatization. However, based on our preliminary analysis, no one in any of the communities – academic, business, NGO – has looked with rigor specifically at privatization and conflict prevention, at the macro forces – trade agreements, structural adjustment programs and loan conditionalities – driving this process, nor at the implications of different institutional arrangements for environmental protection. The UK Department for International Development is co-financing ‘Business Partners for Development', to study and support the creative involvement of industry in tackling poverty and environmental stress. Among its activities, it has a Water Resources cluster focusing on multi-partner arrangements for water service provision in the developing world, seeking to manage and prevent conflict with communities. The World Bank has also established a Public-Private Infrastructure Advisory Facility, one of whose missions is to identify and disseminate best practices. Among private sector actors, the World Business Council for Sustainable Development (WBCSD) has compiled several case studies on industry, fresh water and sustainable development. It has not, however, dealt specifically with how to address and minimize conflict, nor has it looked at alternative institutional arrangements that exclude the private sector. Within the research and academic community, the Water Engineering and Development Centre at Loughborough University in the UK has been examining in great detail the potential for public-private partnerships in water service provision to address the needs of the poor. These are just a sampling of what is happening. Because several initiatives are underway, it is important to take stock and identify the full spectrum of needs and best practices. Each of these groups could bring valuable knowledge and contacts into this project. Organizations and individuals will be engaged as needed to ensure the necessary breadth and depth of expertise and manpower, to ensure access to key decisionmakers in the public and private sectors, and to guarantee adequate levels of funding for the various products envisioned in this proposal. The unique contribution of IISD and GCI will be to build a knowledge base of cases illustrating the factors that can lead to or prevent conflict over access to or consequences of urban water services, to build this knowledge through a multi-stakeholder expert process, and to make this knowledge available to government and private sector decision-makers through educational partnerships and our strongly-established internet presence.

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Activities and Timeline We envision a three-phase, two year project. The first phase will convene a workshop, composed of experts from the private and public sectors, civil society and academia to identify research needs and establish a task force. The second phase will carry out the research and convene the task force to identify conclusions, publishing a book and implementing a communications strategy (website, development and application of education materials). The third phase, yet to be developed, will seek corporate partners for pilot projects, in order to test and assess the effectiveness of the task force’s conclusions. It will publish the results as a follow-up briefing. Phase I (Month 1 – Month 4):

A Scoping Paper will: o Assess existing research and practice in this field, with a view to developing a

network of academics, managers and civil society advocates who can serve as a source of advice, peer review and case authorship.

o Identify key issues by region and institutional arrangement (public, public-private, public-NGO, community-based, tripartite…)

o Develop a list of potential cases o Develop a list of potential task force members o Through desk research, outline 5-10 cases that illustrate the range of arrangements,

issues, regions and possible outcomes.

An Experts’ Meeting, drawing together key representatives from the private sector, management consulting, reinsurance, academic, conservation and donor communities, will use the Scoping Paper as a basis to determine:

o Research needs - What are some of the cases with the greatest potential to provide insightful lessons for a broad range of actors ?

o How shall the research be undertaken and by whom ? o Who should sit on the task force itself ?

Invitees to the experts’ meeting would likely include:

o Mr. Ronnie Kasrils, Minister for Water Affairs and Forestry, South Africa o Dr. Stephen Merrett, Water resources economist o Ms. Mai Flor, Director, Business Development, Lyonnaise des Eaux, Philippines o David Roberts, Exec. Director, Lyonnaise des Eaux, Amman, Jordan o John Briscoe, Senior Water Advisor, The World Bank o Nick Sonntag, CH2M Hill o Larry Haas, Asst. Secretary General of World Commission on Dams secretariat and

expert on public utility regulation design o Ger Bergkamp, IUCN o Trudy Drake, UK Foreign Office – Environmental Security o Adil Najam, (Pakistan), Professor of Environment & International Development,

Boston University o Richard Matthew, Director of Global Change Initiative at University of California,

Irvine o Al Fry, Natural Resources Program Director, World Business Council for Sustainable

Development o Leif Ohlsson, Water Conflict Researcher, SIDA

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o John Miller, Professor of Infrastructure Development, Civil and Environmental Engineering, MIT

o Belinda Calaguas, Advocacy Manager, Water Aid o Alan Nicol, Overseas Development Institute o Margaret Catley-Carlson, Global Water Partnership o Maude Barlow, Council of Canadians o Penelope Brooke, Infrastructure Group, World Bank o Transnational Campaigns manager, Public Services International

Phase II (Month 5 – Month 18):

A Task Force of seven members will be established with a ten-month mandate, drawing upon the experts’ recommendations regarding membership. The task force will commission Thematic Research and Case Studies. The Case studies will be undertaken by independent research teams, supplemented by a member of the secretariat for the sake of consistency and continuity. Contracts for the cases will be assigned on the basis of a call for proposals, to be evaluated based on criteria of:

• Previous notable publications on this or similar subjects, in this field. • Knowledge of local conditions and in particular of the details of the case in question. • Multidisciplinary knowledge base of the project team • Rigour, balance and evenhandedness in terms of the presentation of facts.

It is intended that 75% of our material will be focused on developing countries, and this project will retain a deliberate bias in that respect. Additional funds shall be available to host a modest workshop in the location of the case study, in order to bring together the various stakeholders and discuss the veracity and alternative perspectives to the case. A website shall be launched to house the papers as they are completed, to facilitate peer review and dialogue. The Scoping Paper, case study research and task force conclusions will be edited and published as a handbook and briefing paper and disseminated through our website.

Phase III Dissemination and Pilot Implementation:

Dissemination: A small team will present the results at the Rio+10 process in South Africa, or at the World Water Forum in Kyoto in 2003. Other outlets will include workshops for policy makers, donors and managers in the water companies through our educational partnerships.

With the task force recommendations as its basis, the project team will seek partners for pilot

Field-Level Implementation of the task force’s recommendations. The results of this activity will be published as a follow-up briefing.

IISD will develop teaching materials for dissemination through its various capacity building

activities and partners, and for use in workshops and training programs with environmental managers from the public and private sectors.

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The budget and nature of the activities to be undertaken in Phase III will depend on the needs and interests of partner organizations. Funds for Phase III will be sought at a later stage of the project, in consultation with corporate and educational partners.

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Summary of Deliverables Phase I

Deliverable Timeline

Draft Scoping Paper Month 2 Peer review of Scoping Paper Month 3 Final Scoping Paper Month 4 Experts’ Meeting I Month 4

Phase II

Deliverable Timeline

Commission Case papers Month 5 Research and Write Case Papers Months 5-8 Receive Draft Case papers Month 8 Launch of Website Month 9 Complete peer review of research papers

Month 10

Final Case research papers Month 11 Experts’ Meeting II Month 12 Introduction and Conclusion Month 14 Final Manuscript Month 16 Publication of Book Month 18 Circulation of Phase III proposal Month 18

Monitoring and Evaluation The effectiveness of this project can be measured at several levels, focusing primarily on public sector interest & commitment, as well as through interest and impact on private companies and donors active in this field. We can also assess the quality and impact of the resulting research and recommendations. Public sector interest and commitment can be measured both in terms of governments’ interest in this research, as well as its impact on their ultimate policies regarding privatization of water services. A second gauge for this project is private sector interest. One metric is whether we are able to access both public and private sector funds in support of the initial phase of the research. A second is the degree to which the results of this work are taken up and utilized by corporations and public managers. This can be measured in terms of the level of participation (including commitment of personnel time) in the development of the research cases and reviewing of conclusions, and subsequent financial commitment to the implementation of pilot projects based on the results of the research. Quality and focus of the research will be ensured internally through the task force, who will steer the directions of the research and provide peer review of the cases and conclusions. Moreover, each case will be thoroughly vetted by a combination of external peer reviewers and the project coordinator.

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Budget for Phase I Item & Description Cost (CHF) Project Initiation and Scoping Paper 31,000 Project Officer 26 days @ CHF 500/day 13,000 Urban water expert 2.5 days @ CHF 1,200/day 3,000 Project Coordinator 4 days @ CHF 1,500/day 6,000 Environmental conflict resolution expert 2.5 days @ CHF 1,200/day 3,000 Administration @ CHF 600/day x 10 days 6,000 Workshop in Geneva (12 funded participants) 39,800 Airfare 12 x CHF 2,000 24,000 Per Diems 12 x CHF 200/night x 2 nights 4,800 Project Officer 13 days @ CHF 500/day 6,500 Project Coordinator 3 days @ CHF 1,500/day 4,500 Subtotal 70,800 Overhead @ 7% 4,956 Contingency @ 5 % 3,540 Total 79,296 Total (US $1 = CHF 1.743 ) $45,494 FXConverter - 164 Currency Converter Results Monday, April 2, 2001 1 Swiss Franc = 0.57362 US Dollar 1 US Dollar (USD) = 1.74330 Swiss Franc (CHF) http://www.oanda.com/convert/classic

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Budget for Phase II Item & Description Cost (CHF) Research Papers (8 cases) 160,000Per Case 20,000 Project Officer 6 days @ CHF 500/day 3,000 Lead Writer 7 days @ CHF 1,000/day 7,000 Travel and Research expenses* 5,000 Reviewer 2 day @ CHF 1,000/day 2,000 Project Coordinator 1 day @ CHF 1,500/day 1,500 Workshop** 1,500 Task Force Membership & Administration 80,000 Honorariums (7 x CHF 10,000) 70,000 Project Coordinator 3 days @ CHF 1,500/day 4,500 Project Officer/Admin. 11 days @ CHF 500/day 5,500 Closing Workshop in Geneva (12 participants) 33,800 Airfare 10 x CHF 2,000 20,000 Per Diems 12 x CHF 200/night x 2 nights 4,800 Project Officer 6 days @ CHF 500/day 3,000 Project Coordinator 4 days @ CHF 1,500/day 6,000 Website 10,000 Web design team 7 days @ CHF 1,000/day 7,000 Sr. Communications Officer 1 day @ CHF 1,500/day 1,500 Project Officer 2 days @ CHF 500/day 1,000 Photographic Material 500 Book and Policymakers' Briefing 39,000 Project Officer 15 days @ CHF 500/day (intro & conclusion, edits) 7,500 Lead Author Intro/Conclusion 6 days @ CHF 1,000/day 6,000 Project Coordinator 3 days @ CHF 1,500/day 4,500 Editor 5 days @ CHF 500/day 2,500 External Reviewer 1 day @ CHF 1,500/day 1,500 Layout and Printing 5,000 Distribution 2,000 Book buyback 10,000

Project Assistant CHF 3,000/month x 6 months @ 50% time 9,000

Subtotal 331,800 Overhead @ 7 % 23,226Contingency @ 5 % 16,590 Total CHF 371,616Total (US $1 = CHF 1.743 ) US$ 213,205

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* Travel and research expenses are to be given to an author or group of authors experienced in the issues and knowledgeable of the particular instances of each case, to cover their time, expenses and materials. Each author/team will be required to submit a careful accounting of expenses. ** The workshop budget is designed to cover the costs of the rental of workshop space, the travel costs of participants from all stakeholder groups and translation services, where needed.

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Annex I – Members of Previous IUCN Task Force on Environment and Security Ambassador Mohamed Sahnoun (chair)

Senior Special Advisor to the Director, War-Torn Societies - International Special Representative of UN Secretary-General in Africa , and former member of the Brundtland Commission (World Commission on Environment and Development).

Dr. Pascal O. Girot

The IUCN-CEESP Regional Vice-Chair for Central America, teaching at University of Costa Rica’s School of Geography since 1987. Consultant on post-disaster assessments and planning with IADB, UNEP and UNDP.

Dr. Richard Matthew

Assistant Professor of International and Environmental Politics in the Schools of Social Ecology and Social Science at the University of California at Irvine, and Director of the Global Environmental Change and Human Security Research Office at UCI.

Dr. Leif Ohlsson

Peace & development researcher at Orebro University, Sweden. Research focus on risk of conflicts within countries as a result of water scarcity.

James Gasana

A forester by training and former minister in the government of Rwanda (resigned, 1993), he has extensive field experience in the planning and implementation of natural resource management and integrated rural development projects; in national planning of the rural sector; and in managing negotiation processes to settle socio-political conflicts.

Dr. Asif Ali-Zaidi Director, Pakistan Environment Programme (IUCN/CIDA) and IUCN Regional Director, Pakistan Eric Schmausser Corporate Environmental Risk Management, Reinsurance & Risk Division Swiss Reinsurance Company

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Annex II –Project Team Mark Halle Project Coordinator, Environment & Security

Director, Trade and Investment Program, IISD In addition to serving as a Senior Advisor to the World Conservation Union (IUCN) and to the International Institute for Environment and Development (IIED), Mark Halle directs IISD’s Trade and Investment Program, and founded its European Office in Geneva, Switzerland. After a childhood in Switzerland and a BA in History at Tufts University in Massachusetts, Mark completed a post-graduate degree in the philosophy of history at the University of Cambridge. He worked in the Policy Planning Office of the United Nations Environment Programme in Nairobi and Geneva from 1975 to 1980, and the conservation division of the World Wildlife Fund - International from 1980 - 1983 before joining IUCN, where he remained until 1998, successively directing the field operations, fund development, and global policy divisions. In 1999, the OECD Development Assistance Committee approached IUCN, requesting a study of the implications of the linkages between environment and security for development assistance. Mark directed this study, sparking his own interest in the environmental security field. Jason Switzer Project Officer, Environment & Security, IISD A licensed mediator trained through the Harvard Mediation Program, Jason has worked on negotiated public consensus building processes for the World Commission on Dams, for the hazardous waste clean up of a major military base in the United States (at the Consensus Building Institute), and for the design of earthquake risk management plans in developing country cities. He holds masters degrees in Environmental Engineering and in Technology Policy from the Massachusetts Institute of Technology, where his research for the Technology, Business and Environment Program looked at the impact of management systems on the environmental performance of large corporations. Jason has several professional publications in the field of Business and Sustainable Development, including two articles for the journal of Environmental Quality Management and a chapter in ISO 14000: Case Studies and Practical Experiences, edited by Dr. Ruth Hillary and published by Greenleaf in late 2000. He is currently editing a book on environment, conflict, disaster and their links to conservation, a co-publication by the World Conservation Union (IUCN) and IISD. Fiona Curtin Water Programme Manager, Green Cross International Having completed a BA in Philosophy, Politics and Economics at Oxford University, Fiona worked for UNHCR for three years as a researcher and project assistant and in the emergency units created during the Yugoslavia and African Great Lakes crises. This experience led to her becoming project coordinator and co-author of a report on the causes of conflict and the Prevention of Mass Forced Displacement commissioned by the UN Secretary General in the aftermath of these tragedies. Having left UNHCR to take a masters degree in International Relations at the Graduate Institute of International Studies in Geneva, for which she specialised in nationalism, ethnic identity and inter-cultural relations, Fiona was hired by Green Cross International to research and write the report on National Sovereignty and International Watercourses, which was presented at the World Water Forum in The Hague in March 2000. This work awakened an interest in environmental rights, security and economics, and Fiona has remained at Green Cross International as Water Programme Manager and head of international research and publications, writing extensively on a wide range of issues (including gender, dams, war and the environment, and privatisation) and coordinating GCI water projects in several countries.